Ma gave the hint when receiving Michael Splinter, president and chief executive officer of the U.S.-based Applied Materials Inc., the global leader in nano manufacturing technology solutions.

The president noted that the U.S. semiconductor maker Intel Corp. caused a commotion in the global semiconductor industry when it announced in 2007 that it would begin producing 12-inch semiconductor wafers using 90-nanometer or 65-nanometer processes in China in 2009.

"Taiwan obviously is lagging behind the U.S., as the government has so far allowed chipmakers to produce only 8-inch or smaller semiconductor wafers in China and to use 0.18-micron or larger processes in China," Ma said.

Accordingly, Ma noted, the government will move to relax the controls, as long as such a move does not violate the spirit of the Wassenaar Arrangement on Export Control for Conventional Arms and Dual-Use Goods and Technologies.

The multilateral arrangement was established in 1996 to ensure that transfers of these items do not contribute to the development or enhancement of military capabilities that undermine regional and international security and stability.

According to Ma, such relaxation of the rules would be "reasonable and necessary" given that the United States -- a major participating state of the Wassenaar Arrangement -- has not opposed the plan by Intel.

Ma said that since setting up operations in Taiwan in 1989, Applied Materials has been increasing its staff and production in Taiwan, adding that he's glad to learn that the company plans to expand its production in Taiwan to NT$70 billion in 2009.

Noting that Taiwan has taken the lead in the world in wafer foundry, IC design and IC packaging, Ma urged Applied Materials to expand its investment on the island to help Taiwan sustain its global leading position in the fields.

"I hope the company will continue increasing its investment in Taiwan to help Taiwan achieve the goal of becoming a global innovation center and a regional operations hub," Ma said.

It is expected that the Ministry of Economic Affairs (MOEA) will announce in August relaxing the restrictions on mainland China investment by local chipmakers, according to a timetable set by the MOEA.

The economics ministry will relax controls on mainland China investors by Taiwanese enterprises in three stages. In July, the ministry will boost the ceiling limit on China investment to 50 percent of the net worth of Taiwanese enterprises from the existing 40 percent.

In August, the economics ministry will ease restrictions on the industries Taiwanese enterprises are allowed to invest in China.

In September, the ministry will reveal a concrete timetable for liberalizing investment in Taiwan by mainland Chinese enterprises.

Vice Economics Minister Shih Yen-hsiang said now that weekend direct charter flights across the Taiwan Straits and the direct visit to Taiwan by mainland Chinese tourists have been put into practice, cross-strait investment has become one of the most critical issues for both sides.

Shih said approved Taiwanese investments in China came to US$9.974 billion in 2007, representing an increase of over 30 percent from 2006. In the first five months of this year, total approved Taiwanese investments in the mainland also surged 30 percent from a year earlier to US$4.1 billion.

The figures indicated that mainland China has become a major investment destination for Taiwan enterprises, and therefore the normalization of cross-strait ties has been quite imperative for making Taiwan stronger and facilitating its links to the world.